LONDON: Global stockmarkets shot higher on Wednesday after a US company reported positive results on the use of its anti-viral drug Remdesivir against the new coronavirus which more than offset news of a massive downturn in the American economy.
Meanwhile oil prices spiked, with US benchmark oil WTI soaring by more than a third, following data showing crude stockpiles in the United States rose less than expected.
US and European stocks both advanced after Gilead Science said that remdesivir, one of the most highly anticipated drugs being tested against the new coronavirus, showed positive results in a large-scale US government trial.
It said the National Institute of Allergy and Infectious Diseases would provide more information.
"The US recession is beginning, but financial markets seem to only care about Gilead's remdesivir," said market analyst Edward Moya and online currency trading firm Oanda.
"Risk appetite is roaring back on news that positive data came out of the National Institute of Allergy and Infectious Diseases' (NIAID) study of the investigational antiviral remdesivir for the treatment of COVID-19."
Shares in Gilead Science were up 5.7 percent in late morning trade in the United States.
Remdesivir is an an anti-viral medicine and not a vaccine, thus it could help in the treatment of those infected with the new coronavirus but not block new infections -- which is key to ending lockdowns and other restrictions that have hammered the global economy.
However another study, this time based on patients in Wuhan, China, believed to be the starting point for the pandemic, showed no significant benefits in patients.
"Investors should know the script by now," said Chris Beauchamp, chief market analyst at online trading firm IG.
"This is a market that ignores or rides out bad news and focuses on the good data, no matter how limited that might be," he said.
The bad news Wednesday was a worse than expected 4.8 percent contraction in US first quarter GDP.
It was the biggest decline since the Great Recession and ended more than a decade of growth for the US economy.
"The market's sanguine reaction to the US GDP figure may seem odd, but investors were aware that Q1 would be bad, and indeed are also aware that Q2 will be worse," said Beauchamp.
The US Federal Reserve was holding its latest policy meeting Wednesday, with traders looking to see if it has any more words of comfort for markets after pledging financial backstops to banks, businesses and local and state governments.
The US central bank, like many global counterparts, has also embarked on a massive bond-buying scheme aimed at kick-starting lending and so the economy.
The European Central Bank meanwhile holds its monetary policy committee meeting on Thursday.
London - FTSE 100: UP 2.6 percent at 6,115.25 points (close)
Frankfurt - DAX 30: UP 2.9 percent at 11,107.74 (close)
Paris - CAC 40: UP 2.2 percent at 4,671.11 (close)
Milan - FTSE MIB: UP 2.2 percent at 18,067.29 (close)
Madrid - IBEX 35: UP 3.2 percent at 7,0555.70 (close)
EURO STOXX 50: UP 2.2 percent at 2,996.08
New York - Dow: UP 2.2 percent at 24,626.71
Hong Kong - Hang Seng: UP 0.3 percent at 24,643.59 (close)
Shanghai - Composite: UP 0.4 percent at 2,822.44 (close)
Tokyo - Nikkei 225: Closed for a holiday
Brent North Sea crude: UP 10.9 percent at $22.69 per barrel
West Texas Intermediate: UP 32.56 percent at $16.36 per barrel
Euro/dollar: UP at $1.0852 from $1.0820 at 2100 GMT
Dollar/yen: DOWN at 106.65 yen from 106.87
Pound/dollar: UP at $1.2430 from $1.2426
Euro/pound: UP at 87.31 pence from 87.07 pence